Solida is a wholly-owned subsidiary of Banco Mercantil del Norte (Banorte), the third largest bank in Mexico in terms of asset size. Banorte is publicly listed and has a market capitalization of around US$9.4 billion as of April 15, 2010. Established in 2001 as an investment vehicle, Solida started operations by acquiring non-performing assets for recovery. Today, the Company focuses on two areas of operation: (i) acquisition, administration and collection of portfolios of nonperforming assets; and (ii) alliances in investment projects with strong housing developers in low-income housing projects and to a lesser extent in real estate projects (mostly commercial centers).

The total project cost is estimated at $350 million. IFC is planning to invest $50 million in preferred equity into a master trust. The master trust will then invest directly into individual housing sub-projects.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	0.0
Equity	50.0

* These investment figures are indicative

The master trust will be set up in Mexico and will make investments into individual housing sub-projects throughout the country.

Key development impacts of the Project include: - Increased Housing Supply for Low-Income Households: This Project is expected to alleviate the current housing deficit in Mexico, including in a few frontier states and benefit over 100,000 families in the low to middle income segments with increased supply of quality and affordable entry level housing. - Community Development: The housing developments built by the homebuilders financed by Solida and IFC will contribute to urban infrastructure development and surrounding community development. In addition, the Project helps support the urbanization efforts of local governments, as the housing projects include partial infrastructure works. - Job Creation and Financial Security: The Project will create job opportunities both during construction and operation of the housing communities. Increased supply of low-cost housing developed by the Company will make an impact on the lives of the low income purchasers who will improve their personal security and through payment of their mortgage build up equity (often for the first time) in a significant asset. - Enhanced Local Supply Linkages: The Project will increase demand for construction and building materials in the country. Once the construction is completed, the housing units will stimulate the use of local supplies of goods and services, supporting maintenance, retailing and wholesale operations. Moreover, the low income properties financed by the Project are often the buyers' first property title and such property rights are considered a key determinant of economic development as they promote the formal economy.

The expected additionality for IFC is as follows: (i) Provide long-term equity capital not available otherwise to developers, and free up capital requirements at Solida for additional investments in lower-income housing projects. (ii) Provide global expertise and market perspective for the sector, and particularly in the low income housing segment, enabling Solida to gauge its strategy and growth plans. (iii) Provide technical support to Solida to be in compliance with IFC's environmental and social Performance Standards.

This project has been classified as a Category FI project. Social and environmental issues comprise the implementation of Banorte''s Social and Environmental Management System (SEMS) in Solida’s activities, and Solida’s own assessment of housing projects financed by the IFC-financed Master Fund.

Banorte is currently developing a SEMS as required under IFC’s investment agreement, which Solida agreed to implement when completed to IFC’s satisfaction. Solida has a due diligence system to ensure that applicable legal requirements and contractual commitments are complied with throughout the life of the individual trusts financed by the Master Fund. Additional components will be added to Solida’s due diligence protocol to include IFC’s environmental and social requirements. While Banorte’s SEMS is under development, IFC will participate in the due diligence of significant projects by the housing developers sponsored by Solida.